NEW DELHI--The Indian government and local telcos should work together to drive large-scale deployments of machine-to-machine (M2M), which can enhance the life of residents living in villages while bringing more revenues for telcos.

Moreover, with the voice market getting saturated and ARPU (average revenue per user) squeezed, telcos are looking for new income opportunities and the introduction of M2M has opened a new business line for these market players, noted Swati Kapoor, research manager at 6Wresearch.

There are several rudimentary forms of M2M in rural India, including services such as SMS to provide weather updates and wholesale crop prices to farmers. "With the accelerated adoption of M2M, rural masses could tap solutions that will provide them more personalized real-time information," William said. This will help them make more informed decisions.

The launch of 3G in the country has also been a growth driver for M2M, which is expected to gain momentum in the next five years. "3G allows faster data communication, which was not possible with 2G and 2.5G networks," Kapoor said.

Projects such as Aadhaar will give further impetus. Coupled with M2M, William said the national identification number can be used to improve both transparency as well as utilization of financial benefits being provided to the rural masses.

Vishal Tripathi, Gartner's principal research analyst, added there was considerable scope for M2M deployments in the BFSI (banking, financial services and insurance) segment.

According to a joint study conducted by GSMA and Machina Research, the number of total connected devices would grow from more than 9 million today to 24 million in 2020. According to 6Wresearch, India M2M modules market would reach US$98.38 million by 2016 at a CAGR (compound annual growth rate) of 33.81 percent. Cellular M2M modules were expected to grow at 35.32 percent over the same period, from 2011 to 2016.

New applications for villagesSeveral M2M applications have gained popularity in rural India including Nano Ganesh, which allows farmers to use mobile phones to remotely monitor and switch on irrigation pumps in remote locations. The app, developed by Ossian Agro Automation (Pune), works in conjunction with Tata Teleservices phones.

There are also apps such as SmartMoo and Silent Observer. Stellapps Technologies, founded in 2011 by a team of IT and telecom professionals, built the SmartMoo automated cow-milking app with the aim to reduce wastage.

"Silent Observer has been deployed in states like Rajasthan and Uttarakhand, and we are in talks with other state governments too," Narendra K Saini, CEO of Sukrut Systems, told ZDNet in a phone interview. The company also offers a tool which provides weather information to farmers, and is now working on a water management application targeted at rural India.

To drive the market, India needs to establish M2M standards such as those from Europe, China and the United States. Kapoor said: "India's M2M market is still not properly commercialized, even in urban areas, so deployments in rural areas will take time."

Healthcare and banking applications, though, are expected to gain momentum. For instance, to increase financial inclusion in rural India, the government is planning to install micro ATMs, which are handheld devices embedded with biometric functions. These devices are connected over cellular networks to facilitate banking transactions.

Connectivity a big concern However, large-scale deployment of M2M applications in rural India is fraught with challenges, where the biggest is the absence of high-speed Internet connectivity, noted Tripathi.

William concurred, pointing to connectivity and coverage as the biggest barriers, as most private telecom operators have limited coverage in rural India.

Lack of awareness is another major hurdle. Kapoor noted consumers still relied on traditional wired-based communication systems for transmission.

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William added that, given the low ARPU, telcos remain apprehensive about the profitability of M2M services. There has yet to be a major pilot project which has demonstrated the business benefits of M2M, and this is creating much scepticism in the industry, he explained.

The rural market is very price-sensitive and has limited access to resources such as power, he noted, adding that access to low-cost devices is another concern. William urged industry players to develop devices suited for Indian conditions, so they should be low-cost while also consuming less power.

Saini said: "The telecom operators need to take a more daring approach toward M2M, as it holds the potential to increase ARPUs and reduce the subscriber churn." He said the government, telcos, as well as solution providers and consultants in the M2M space need to come together to give this market the critical push.

Indian government must play catalyst The government, on its part, needs to identify opportunities and come up with policy initiatives which would encourage M2M deployments in specific areas, Saini said.

Kapoor cited the energy sector as an example where M2M modules are used to capture readings from energy meters. The Indian government is mandating the deployment of digitized energy meters to minimize power loss and theft, and this is expected to create high demand for M2M modules in the country.

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"It is estimated, in the coming years, around 200 million smart meters will be deployed in the Indian market," she said. There are growth opportunities in this market since only half of the power transmitted is billed for, according to the government.

Rajasthan already has started using M2M modules to capture data from meters to achieve its long-term strategy of deploying smart grids.

Tripathi underscored the need for for the government to play a dual role, creating an environment which is conducive for the growth of M2M in India, as well as giving benefits to M2M service providers to develop an ecosystem.

According to William, the Indian government is already addressing M2M communication issues, especially related to 3GPP standards, by establishing research institutes such as the Centre of Excellence in Wireless Technology. This is a public-private initiative established by the government's Department of Information Technology in partnership with the Indian telecom industry.

"The biggest catalyst will be when the government launches a few M2M initiatives and demonstrates their success. This will automatically fuel private sector involvement," he said.

Swati Prasad is a New Delhi-based freelance journalist who spent much of the mid-1990s and 2000s covering brick-and-mortar industries for some of India's leading publications. Seven years back when she took to freelancing, India was at the peak of its "outsourcing hub" glory and the world of Indian IT, telecom and Internet fascinated her....
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